For instance, it initially gained public support with a campaign that digitized an old Chinese New Year tradition: sending money in red envelopes to family and friends.Īaron Klein of the US think tank Brookings details how the scope and use cases for Wechat payments have evolved over time. Launched in 2013, Wechat Pay exploits the synergy of value between the social network of contacts and the ability to make transfers to these same contacts in one place, without leaving the app. Like WhatsApp, Wechat emerged as a messaging app in 2009, but has since become a “super app” with a variety of functions available to users on one platform. The most emblematic case is the Chinese Wechat Pay. The idea of integrating payment services with social networks is not new. With this, the major banks and payment institutions will have to provide open APIs that allow the initiation of payments by third parties authorized by the Central Bank. The third phase of Open Banking, which should begin on August 30, 2021, will be dedicated to sharing data for payment initiation. The market will be able to explore the synergy between this modality and other initiatives by the Central Bank – especially interoperability with Pix and sharing of Open Banking. Payment initiation is made possible by partnerships between financial institutions and payment service providers. In the case of WhatsApp Pay in Brazil, which will use Visa’s and Mastercard’s infrastructure, the acquirer will process the transactions, while WhatsApp will authenticate the users for each payment initiation. The PISP does not have direct access to the customers’ bank accounts, nor is it part of the financial flow in the transaction, but simply sends messages to the financial institutions in the payment arrangement. This is done through programming interfaces that establish contact between the payment initiator and the account provider institutions. When the final user registers a request to make a transfer, the PISP sends a command for the funds to be debited from the payer’s account and credited to the payee’s account. The payments initiation service provider (PISP) was regulated by the Central Bank in October 2020. WhatsApp payments were initially launched in Brazil as soon as June 2020, but the Central Bank suspended the operation at the time, allowing only pilot testing. In India, the service was officially rolled out in November 2020, and is integrated to the Unified Payments Interface (UPI) – similar to the Brazilian Pix. However, while most of these wallets are geared towards payments for goods and services, WhatsApp will be limited to transfers between individuals registered in the app.įor now, the WhatsApp arrangement is composed of the two flagships Visa and Mastercard, the acquirer Cielo, and the issuing institutions Banco do Brasil, Nubank and Sicredi.īrazil will be the second country to host WhatsApp Pay. WhatsApp Pay will work as a digital wallet, just like others such as Google Pay, Samsung Pay, Paypal and PicPay. To use the service, users will need to register a debit card or a prepaid card, which will be used to transfer and receive funds directly from and to their accounts. With this approval, WhatsApp, owned by the Facebook group, will be able to offer in-app peer-to-peer transfers.ĭetails about the new service have not yet been disclosed, but what is known is that like BCB’s instant payments Pix, transfers through the chat app will be free and available to users at any time, 24/7. as a payments initiation service provider. On March 30, the Central Bank (BCB) authorized Mark Zuckerberg’s Facebook Pagamentos do Brasil Ltda. WhatsApp Pay should become a reality in the coming weeks, Mastercard told Reuters.
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